Supervisors Call on Congress for Pension Help

By |May 18, 2010

County Supervisors on Tuesday unanimously adopted proposed language for federal pension legislation that would change pension enrollment rules for Orange County workers.

The move comes after eight months of unsuccessful efforts to get U.S. Treasury officials to approve a regulatory change that would have the same effect on the county’s retirement system.

The change would give local governments the ability to allow new hires and current employees to select between different retirement benefit plans. In the case of Orange County, one option would provide a lower benefit and allow employees to pay less into the system.

Officials have no estimates on how many employees would choose a lower benefit option, and therefore no idea of how much such legislation would save the county’s pension system. But it does have the potential to slow the growth of the system’s unfunded liability, which currently stands at about $2.3 billion.

This weekend, County Supervisor Bill Campbell and Orange County Employees Association General Manager Nick Berardino met in Los Angeles with U.S. House Ways and Means Committee Chairman Sander Levin, D-Mich.

Campbell, who today urged his colleagues to approve an amendment to pending federal pension legislation, said he and Berardino had a very productive meeting with Levin explaining their proposal and how it could affect Orange County.

Berardino declined to comment on the meeting.

Currently, a glitch in the tax code meant for private companies doesn’t allow such changes without triggering higher taxes.

After unveiling the pension change proposal last year, Orange County officials worked with Treasury officials but now conclude that changing regulations through an administrative mechanism will take too long.

Campbell said Levin — who practiced pension law early in his career — told him that the Ways and Means Committee is considering pension reform legislation, and he seemed supportive.

“He told us he would review it when he got back to Washington, D.C., and contact Congresswoman Sanchez,” Campbell said. “This is very clean and simple if we can pull it off.”

Given the partnership with labor, and the efforts of Supervisor Janet Nguyen and CEO Tom Mauk — who recently traveled to Washington, D.C., and lobbied for the change — the plan has a good chance because it’s a collaborative solution to a thorny and politically divisive topic, Campbell said.

The upside, Campbell added, is “this gives the ability to get a local solution. If it works, it really could be the beginning of a possible way out.”